Efficient Auctions and Interdependent Types

Efficient Auctions and Interdependent Types

Before the work of Harsanyi (1967–1968) economists used to routinely argue that game theory could not be applied to economic settings because it required common knowledge of the environment. Following Harsanyi (1967–1968), economists accepted that rich enough “type spaces” allowed any possible lack of common knowledge to be incorporated. But very rich type spaces would be needed, and applied wo...

EFFICIENT AUCTIONS AND INTERDEPENDENT TYPES By

Efficient Interdependent Value Combinatorial Auctions with Single Minded Bidders

We study the problem of designing efficient auctions where bidders have interdependent values; i.e., values that depend on the signals of other agents. We consider a contingent bid model in which agents can explicitly condition the value of their bids on the bids submitted by others. In particular, we adopt a linear contingent bidding model for single minded combinatorial auctions (CAs), in whi...

Partnerships and double auctions with interdependent valuations

In a symmetric independent private values setting a sealed-bid double auction dissolves a partnership e¢ciently. This well known result remains valid in a model with interdependent valuations. However, if the interdependent components of valuations are large agents might prefer not to participate in a double auction. Therefore a simple extention of the rules of double-auctions is suggested that...

Information Acquisition in Interdependent Value Auctions By

We consider an auction environment with interdependent values. Each bidder can learn her payoff type through costly information acquisition. We contrast the socially optimal decision to acquire information with the equilibrium solution in which each agent has to privately bear the cost of information acquisition. In the context of the generalized Vickrey–Clarke– Groves mechanism, we establish t...